Today's trade figures are a stark reminder to the structural deficiencies of the U.S. economy and the reason for our negative dollar outlook for the year despite (its) recent bounce.

This does not mean that currency markets have completely eliminated all concerns about the trade deficit when assessing the dollar,

Today's disappointing labor report supports the notion that the emerging soft patch in the U.S. economy is here to stay.

It's good for the U.S. to see a relatively weaker dollar, but it's not a good idea for the U.S. Treasury to signal it wants a weaker dollar. The decline in the U.S. currency could be faster than they wish.

Those who expect further rate hikes can note that the real Fed Funds rate has yet to reach at least 3 percent, ... But with oil prices rising 58 percent since last June (when rates started to rise) and with U.S. manufacturing nearing contraction, the bond market is telling the Fed that it had better not raise rates further.

The rise in the dollar is likely to be limited to maybe a maximum of 3 to 5 percent.